CLEVELAND, May 31, 2016
/PRNewswire/-- Cliffs Natural Resources Inc. (NYSE:
CLF) announced today that it has entered into a new
long-term commercial agreement with ArcelorMittal USA LLC to supply tailor-made iron ore pellets
for the next ten years through 2026. The new agreement will replace
two existing agreements expiring in Dec.
2016 and Jan. 2017 and fill
the entirety of ArcelorMittal's pellet purchase requirements from
the previous contracts. The new commercial agreement includes
ArcelorMittal's total purchases of iron ore pellets from Cliffs up
to 10 million long tons and preserves Cliffs' current position as
ArcelorMittal USA's sole outside
supplier of pellets. Accordingly, Cliffs will continue to be the
sole pellet supplier of ArcelorMittal's Indiana Harbor West and
Cleveland Works steelmaking
facilities, while maintaining the current level of pellet supply to
ArcelorMittal's Indiana Harbor East facility. The new contract also
establishes a minimum tonnage of pellets of 7 million long
tons, which is higher than the current minimum level from the two
previous contracts combined.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer, said, "Cliffs is
pleased to announce a major accomplishment within the execution of
our strategy, which is the signature of a new 10-year pellet supply
agreement with ArcelorMittal. We arrived at a mutually beneficial
agreement, as both companies recognize the importance of bringing
sustainable value to our respective businesses." Goncalves added,
"The signing of the new supply agreement confirms what we have
always stated regarding the strength of the business relationship
between Cliffs and ArcelorMittal USA. The new agreement also removes any
remaining uncertainty about Cliffs, and supports our conviction in
the bright future of our Company, its employees, its shareholders,
and all other stakeholders, including the communities in which we
operate."
Pricing for the pellets under the agreement will be adjusted by
the price of steel in the U.S. domestic market, and iron ore market
based and general inflation indices. Based on current market
levels, Cliffs anticipates an improvement in overall United States
Iron Ore realized revenues per ton in 2017, when compared to the
company's current guidance for 2016.
About Cliffs Natural Resources Inc.
Cliffs Natural
Resources Inc. is a leading mining and natural resources company in
the United States. The Company is
a major supplier of iron ore pellets to the North American steel
industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also operates an iron ore
mining complex in Western
Australia. Driven by the core values of safety, social,
environmental and capital stewardship, Cliffs' employees endeavor
to provide all stakeholders operating and financial transparency.
News releases and other information on the Company are available at
www.cliffsnaturalresources.com.
Forward-Looking Statements
This release contains
statements that constitute "forward-looking statements" within the
meaning of the federal securities laws. As a general matter,
forward-looking statements relate to anticipated trends and
expectations rather than historical matters. Forward-looking
statements are subject to uncertainties and factors relating to
Cliffs' operations and business environment that are difficult to
predict and may be beyond our control. Such uncertainties and
factors may cause actual results to differ materially from those
expressed or implied by the forward-looking statements. These
statements speak only as of the date of this release, and we
undertake no ongoing obligation, other than that imposed by law, to
update these statements. Uncertainties and risk factors that
could affect Cliffs' future performance and cause results to differ
from the forward-looking statements in this release include, but
are not limited to: trends affecting our financial condition,
results of operations or future prospects, particularly the
continued volatility of iron ore prices; availability of capital
and our ability to maintain adequate liquidity, in particular
considering borrowing base reductions from the sale of non-core
assets; our level of indebtedness could limit cash flow available
to fund working capital, capital expenditures, acquisitions and
other general corporate purposes or ongoing needs of our business,
which could prevent us from fulfilling our debt obligations;
continued weaknesses in global economic conditions, including
downward pressure on prices caused by oversupply or imported
products, including the impact of any reduced barriers to trade,
recently filed and forthcoming trade cases, reduced market demand
and any change to the economic growth rate in China; our ability to reach agreement with our
iron ore customers regarding any modifications to sales contract
provisions, renewals or new arrangements; uncertainty relating to
restructurings in the steel industry and/or affecting the steel
industry; our ability to maintain appropriate relations with unions
and employees and enter into or renew collective bargaining
agreements on satisfactory terms; the impact of our customers
reducing their steel production or using other methods to produce
steel; our ability to successfully execute an exit option for
certain of our Canadian entities that minimizes the cash outflows
and associated liabilities of such entities, including the
Companies' Creditors Arrangement Act (Canada) process; our ability to successfully
identify and consummate any strategic investments and complete
planned divestitures; our ability to successfully diversify our
product mix and add new customers beyond our traditional blast
furnace clientele; the outcome of any contractual disputes with our
customers, joint venture partners or significant energy, material
or service providers or any other litigation or arbitration; the
ability of our customers and joint venture partners to meet their
obligations to us on a timely basis or at all; the impact of
price-adjustment factors on our sales contracts; changes in sales
volume or mix; our actual levels of capital spending; our actual
economic iron ore reserves or reductions in current mineral
estimates, including whether any mineralized material qualifies as
a reserve; events or circumstances that could impair or adversely
impact the viability of a mine and the carrying value of associated
assets, as well as any resulting impairment charges; the results of
prefeasibility and feasibility studies in relation to projects;
impacts of existing and increasing governmental regulation and
related costs and liabilities, including failure to receive or
maintain required operating and environmental permits, approvals,
modifications or other authorization of, or from, any governmental
or regulatory entity and costs related to implementing improvements
to ensure compliance with regulatory changes; our ability to
cost-effectively achieve planned production rates or levels;
uncertainties associated with natural disasters, weather
conditions, unanticipated geological conditions, supply or price of
energy, equipment failures and other unexpected events; adverse
changes in currency values, currency exchange rates, interest rates
and tax laws; risks related to international operations;
availability of capital equipment and component parts; the
potential existence of significant deficiencies or material
weakness in our internal control over financial reporting; and
problems or uncertainties with productivity, tons mined,
transportation, mine-closure obligations, environmental
liabilities, employee-benefit costs and other risks of the mining
industry. For additional factors affecting the business of Cliffs,
refer to Part I – Item 1A. Risk Factors of our Annual Report on
Form 10-K for the year ended December 31,
2015. You are urged to carefully consider these risk
factors.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cliffs-natural-resources-inc-and-arcelormittal-usa-llc-enter-into-new-long-term-iron-ore-supply-agreement-through-2026-300276796.html
SOURCE Cliffs Natural Resources Inc.